Memory price inflation inflates tech CapEx
The speakers noted that a significant portion of the recently raised hyperscaler CapEx budgets is driven by skyrocketing memory chip costs rather than an increase in physical infrastructure volume.
The argument
Memory supply constraints are driving up costs for components like HBM and DRAM, which is expected to eventually filter through to consumer hardware prices (e.g., Apple devices) and benefit memory manufacturers.
The thesis, stress-tested
✓ What validates it
- ✓Micron (MU) reporting higher average selling prices (ASPs) for DRAM/HBM
- ✓Apple raising retail prices on memory-heavy hardware configurations
▸ Risks discussed
- ▸Memory price cycles can quickly turn from shortage to oversupply
- ▸Hardware OEMs may absorb costs rather than passing them to consumers, hurting margins
Hear it yourself
"And and that's kind of the second big picture comment here, which is this is a bunch of the largest companies growing quickly by servicing these other companies. Super interesting. And then the last, which is going back to Google. I thought everything was really good, but it was interesting. Let's talk about Gemini. You see all these evals of Gemini, and, you know, it's nearly as good. It's nearly as good for coding. Right? And then they cited a number, and I I I wrote it down, and I apologize. I couldn't find it in front of me. Like, the month on month token growth, q one was pretty good. It was like 70%, x t billion tokens per second or some vanity metric like that."
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